Colorado Legislative Council Staff

STATE

REVISED FISCAL IMPACT

(Replaces Revised Fiscal Note dated February 24, 1998Cash Fund Revenue and Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-215

Rep. Adkins

Sen. Bishop

Date:

Bill Status:

Fiscal Analyst:

April 15, 1998

Senate Agriculture

Steve Tammeus (866-2756)

 

TITLE:            CONCERNING THE ESTABLISHMENT OF A FUND TO PROMOTE THE CONSERVATION OF NATIVE SPECIES, AND MAKING AN APPROPRIATION IN CONNECTION THEREWITH.


Summary of Legislation


STATE FISCAL IMPACT SUMMARY

FY 1997/98

FY 1998/99

FY 1999/00

State Revenues

General Fund

Species Conservation Trust Fund



Interest



Donations/Interest

State Expenditures

Capital Construction Fund - to Trust Fund

Species Conservation Trust Fund


$7,000,000


$3,000,000



$1,000,000*

FTE Position Change

 

Contract

Contract

Local Government Impact — None

*Expenditures are subject to adoption and passage of a joint resolution which identifies a specific listing of eligible projects and costs. Refer to Table 3 on page 6 of this fiscal note for a summary of annual investment earnings and expenditures.


            The reengrossed bill requires the Department of Natural Resources, after consultation with the Colorado Water Conservation Board (CWCB) and the Wildlife Commission, to annually prepare a species conservation eligibility list describing programs and associated costs. The eligibility list shall be subject to modification and adoption through passage of a joint resolution by the General Assembly. The department shall also provide a detailed report to the General Assembly on the status of activities, their effectiveness on the recovery of such species, any proposed future activities, and an assessment of habitat benefits


            The bill creates the Species Conservation Trust Fund in the State Treasury. Expenditures from the fund shall be subject to annual authorization by the General Assembly. All income derived from the deposit and investment of moneys in the fund shall be credited to the fund, and all unexpended moneys at the end of each fiscal year shall remain within the fund. No moneys in the fund shall be subject to any management fee. The bill limits, to the maximum extent practical, the amount of fund expenditures to the amount of interest earned by the moneys in the fund. The bill prohibits moneys in the fund from being used to acquire any property through the exercise of eminent domain. The bill requires the department to distribute moneys from the Species Conservation Trust Fund for the following purposes:

 

1)        certain cooperative agreements, recovery programs, and other programs designed to meet state obligations pursuant to the federal “Endangered Species Act of 1973” and that provide regulatory certainty to agreement requirements specified in the bill; and

 

2)        studies and programs established by the DOW and the executive director of the department regarding: a) species placed on the state endangered or threatened list, b) candidate species in order to assist in the recovery or protection of the species to avoid listing of the species, and c) scientific research relating to listing or delisting any species. If a species is proposed to be added to the endangered or threatened species list, the evaluation of the species shall include certain specific scientific data regarding the species and its habitat.


            The bill specifies eligibility requirements for any agreement the state enters to support the provisions of the bill. The bill requires funding to support these agreements to be utilized, to the maximum extent possible, for the purchase or construction of capital assets that may be sold or utilized for other purposes in the event the agreement is terminated. The bill authorizes certain exemptions to this requirement.


            The bill requires the CWCB and the Wildlife Commission to apply for any available grants. Federal grants and voluntary contributions may be accepted by the CWCB, deposited in the Species Conservation Trust Fund, and expended for the implementation of the bill.


            The reengrossed bill appropriates $7,000,000 from the Capital Construction Fund to the Species Conservation Trust Fund for FY 1998-99. The bill specifies this appropriation must be made on or after May 1, 1998, but not later than May 15, 1998. The reengrossed bill also appropriates $3,000,000 from the Capital Construction Fund to the Species Conservation Trust Fund for FY 1998-99. The bill specifies this appropriation must be made on or after May 1, 1999, but not later than May 15, 1999. These appropriations are to be made from the remaining proceeds and interest held by the state from the certificates of participation issued pursuant to the 1989 and 1990 master lease purchase agreements.


            The provisions of this amended bill will affect state cash fund revenue and expenditures. Therefore, the bill is assessed as having a fiscal impact. The bill will become effective upon the signature of the Governor.


State Revenues


            The bill requires the CWCB and the Wildlife Commission to maximize funds by applying for available grants and accepting voluntary contributions. These moneys would be credited to the Species Conservation Trust Fund. The amounts of these grants and donations have not been estimated.


State Expenditures


            Eligibility list and annual report. The bill will require the CWCB and the Wildlife Commission to expend approximately 320 hours of personal services annually to prepare and finalize a list of eligible programs and to prepare the final report. The bill will require the board and the commission to also expend an additional $1,700 annually to conduct public hearings. The DNR believes the CWCB and the Wildlife Commission will be able to absorb these costs within existing resources.


            Existing cooperative agreements. The State of Colorado has entered into cooperative agreements with the federal government and neighboring states of the region to implement specific species recovery programs for the Colorado River, the San Juan River, and Platte River. The total cost of these programs is estimated to be approximately $29 million over the course of 15 years, as explained in the following paragraphs.


            The recovery programs for the Colorado and San Juan rivers are anticipated to require nine years for completion. The annual cost of these programs is estimated to be approximately $1 million, therefore, the total cost for the Colorado and San Juan river species recovery programs is estimated to be approximately $9 million. The recovery program for the Platte River is anticipated to require 15 years for completion. The annual cost of the program for existing permitted facilities is estimated to be approximately $1 million. The program will require an additional $333,333 per year for yet-to-be permitted facilities on the South Platte River. Therefore, the total cost of the Platte River species recovery programs is estimated to be approximately $20 million.


            Studies and programs approved by the DOW. The department believes that these studies and programs will focus on species that are in the listing review process, and/or species for which scientific evidence suggests consideration for listing at the state or federal level. The department has identified initial program costs of $6,900,000 for six species that are candidates for listing at the state or federal level. Table 1 provides a summary of the annual costs for these programs.


Table 1 - Studies and Programs

Species

Study or Program Objective

Annual Cost

Prebles Meadow Jumping Mouse

Habitat Conservation Plan implementation

$300,000

Canadian Lynx

Planning, reintroduction, and monitoring

$360,000

Arkansas Darter

State Conservation Plan implementation

$200,000

Colorado River Cutthroat Trout

State Conservation Plan implementation

$260,000

Mountain Plover

Planning, practice development, and implementation

$200,000

Rio Grande Sucker

State Recovery Plan implementation

$60,000

Total

 

$1,380,000


            In addition to the programs shown in Table 1, the department has developed a strategic plan to address the state-wide issue of conserving all native species. This plan identifies the need for the following additional conservation plans after the completion of the candidate species programs:


            Aquatic Programs. Greenback Cutthroat; Colorado River Cutthroat; Rio Grande Cutthroat; Boreal Toad/Wood Frog; South Platte Native Fishes; Arkansas/Rio Grande Native Fishes; Amphibians, Reptiles, Crustaceans, and Mollusks; and Native Aquatic Programs.


            Terrestrial Programs. Peregrine Falcon; Bald Eagle; Least Turn and Piping Plover; Black Footed Ferret; Prairie Grouse, Lynx and Wolverine; Burrowing Owl; and Kit Fox.


            The department may request any available trust fund moneys for these programs upon completion of the studies and programs identified in Table 1.



            Summary. The total state costs to support the Colorado and San Juan river species recovery programs, the Platte River species recovery programs, and the six candidate species programs are estimated to be $35.9 million. These costs are in addition to the current Long Bill appropriations to the department to support non-game and endangered species conservation programs. Table 2 provides a summary of the department’s estimate of annual costs to fully support the species recovery programs and the candidate species programs.


Table 2 -

Annual Expenditures

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

List development/report

$0

$0

$0

$0

$0

$0

Colorado/San Juan Rivers

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Platte River

0

0

0

1,333,333

1,333,333

1,333,333

Studies and programs

1,380,000

1,380,000

1,380,000

1,380,000

1,380,000

0

Annual Expenditures

$2,380,000

$2,380,000

$2,380,000

$3,713,333

$3,713,333

$2,333,333


            This reengrossed bill provides an initial appropriation of $10,000,000 to the Species Conservation Trust Fund for FY 1998-99. The amounts of the trust fund investment earnings and expenditures are based upon the following assumptions:

               that $7.0 million will be credited to the trust fund during May 1998, and that $3.0 million will be credited to the trust fund during May 1999;

               that trust fund expenditures are subject to the adoption and passage of a joint resolution, and that a joint resolution will be introduced during the 1999 legislative session to authorize expenditures for FY 1999-2000;

               that some portion of the fund principal will be expended each year in addition to any investment earnings that are expended;

               that the trust fund will have an annual investment earnings rate of 6.0 percent; and

               that the department will annually submit a list of eligible programs to the General Assembly each year for funding.


            Table 3 on page 6 of this fiscal note provides a summary of the annual Species Conservation Trust Fund investment earnings and expenditures. Note that the candidate species studies and programs identified in Table 2 will not be accomplished under the provisions of this reengrossed bill. Also note in Table 3 that the fund balance is depleted during the eighth year, FY 2006-07. As stated earlier in this fiscal note, the Colorado/San Juan River recovery programs will require nine years to complete. The Platte River recovery program will require 15 years to complete. The department believes that future additional appropriations will be required to support the remaining costs for the recovery programs and the candidate species studies and programs.



Spending Authority


            NOTE: The reengrossed bill appropriates $7,000,000 from the Capital Construction Fund to the Species Conservation Trust Fund for FY 1998-99. This appropriation must be made on or after May 1, 1998, but not later than May 15, 1998. This fiscal note assumes the appropriation was intended to be made for FY 1997-98 rather than FY 1998-99.


            This fiscal note would imply that an appropriation of $7,000,000 from the Capital Construction Fund to the Species Conservation Trust Fund would be required for FY 1997-98, and that an appropriation of $3,000,000 from the Capital Construction Fund to the Species Conservation Trust Fund would be required for FY 1998-99. No new state spending authority would be required for FY 1997-98 or FY 1998-99.



Departments Contacted


            Law                Treasury         Natural Resources


















 

Table 3 - Species Conservation Trust Fund

 

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

 

FY 1998-99

FY 1999-2000

FY 2000-01

FY 2001-02

FY 2002-03

FY 2003-04

FY 2004-05

FY 2005-06

FY 2006-07

 

 

 

 

 

 

 

 

 

 

Beginning Balance

$0

$10,520,000

$10,091,200

$9,636,672

$9,154,872

$7,230,832

$5,191,349

$3,029,497

$737,933

Appropriation

$7,000,000

 

 

 

 

 

 

 

 

Appropriation

$3,000,000

 

 

 

 

 

 

 

 

Expenditures

 

 

 

 

 

 

 

 

 

Platte River Recovery Program

0

 

 

 

(1,333,333)

(1,333,333)

(1,333,333)

(1,333,333)

(1,333,333)

Colorado/San Juan River Recovery Program

0

(1,000,000)

(1,000,000)

(1,000,000)

(1,000,000)

(1,000,000)

(1,000,000)

(1,000,000)

(1,000,000)

Sub Balance

10,000,000

9,520,000

9,091,200

8,636,672

6,821,539

4,897,499

2,858,016

696,164

(1,595,400)

Investment Earnings @ 6.0 %

520,000

571,200

545,472

518,200

409,292

293,850

171,481

41,770

(95,724)

Ending Balance

$10,520,000

$10,091,200

$9,636,672

$9,154,872

$7,230,832

$5,191,349

$3,029,497

$737,933

($1,691,124)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTE: Investment earnings for FY 1998-99 are based upon a principal of $7.0 million invested for 2 months during FY 1997-98 and 12 months during FY 1998-99, and an additional principal of $3.0 million invested for 2 months during FY 1998-99.